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작성자: 오하나 (Analyst, hanaoh@ubiresearch.com)
The display industry has been in a state of confusion by the recent leaking of OLED display panel production technology into China.

As of 2018, five companies (BOE, Everdisplay, Tianma, Truly, and Visionox) have OLED production lines in China, among which only BOE has a line that can produce OLED displays (“Plastic OLED”) using plastic substrates, applied to the premium smart phones such as Samsung Galaxy and Apple’s iPhone. Other panel makers are building lines to produce plastic OLED displays targeting mass production this year and next year.

Monthly production capacity planned by Chinese panel makers by the end of 2020 is about 250K, which is more than the monthly production capacity of Samsung Display (about 180K). If China produces a similar level of panels through mass production, it is clear that Korea cannot defeat China in terms of production costs. The main application of the 6G plastic OLED display is a smart phone; however, the global Smartphone market has slowed down since 2015, especially in the premium Smartphone market, there seem no new markets. If mass applications such as smartphones are not developed, panel makers that do not have cost competitiveness will be hard to survive due to a large oversupply in the near-term and falling panel prices.

Korea is evaluated to have a considerable technical advantage since the production of plastic OLED displays requires a high level of technology and process know-how for the time. However, the industry expects that Chinese government’s support for the panel makers with the background of capital as part of the “China Manufacturing 2025” strategy, will shorten the technology gap quickly.

Chinese panel makers ahead of their mass production by 2019 are also reported to be more aggressively scouting Korea’s major OLED engineers. There are about 100 Korean OLED engineers in Chengdu (B7) plant that produces plastic OLED display of BOE. GVO is also known to have recently hired some important OLED engineers with high salaries. CSOT, which has been known to suffer difficulties from the initial research stage, seems to be expediting the construction of mobile OLED production line, employing Korean OLED engineers at major processes from last year. In addition, HKC, which is not a panel maker, is reported to have hired OLED engineers. This is interpreted as a work for investing in the OLED production line of HKC which has only LCD line, and HKC has recently been named as the merger of TIANMA OLED division.
As of 2018, there are no panel makers in China that can produce OLED display panels at the level produced by Korean panel makers. Although the production capacity and sales structure of Chinese panel makers are different from those of Korea, it is difficult to define yields on the same basis. However, the yield of BOE’s Chengdu (B7) plant, known as the mass production line, is still investigated as a single digit. Other panel makers also expect the product quality and yield problems to be difficult to be resolved by the first half of 2019 even if the mass production lines are launched within the year.

In order for the display industry, which contributes significantly to the Korean economy, to maintain its dominant position in the global display industry, it must maintain its competitiveness through various product development, production and sales strategies. Meanwhile, the size of the display industry needs to grow for the growth of the worldwide OLED industry. In order for Chinese panel makers to supply OLED panels with diverse applications, securing the yield might be the key.

http://olednet.com/wp-content/uploads/2018/07/OLEDNET-1.jpg375709OLEDNET/wp-content/uploads/2015/09/logo_oled.pngOLEDNET2018-07-10 09:13:372018-07-31 17:17:01The second half of 2018 just started, Chinese OLED panel makers are chasing Korea. Where are they?

In the keynote session of IMID 2017 held in Busan on 29th, LG Display’s CTO Kang In-byeong pointed out the future plan of LG Display as “OLED is a strong candidate to lead the future display industry”.

Kang In-byeong, CTO, said that by 2020, large-area OLED will increase its production capacity by 7 times to 2020, thereby reducing the cost cap with LCD and leading the market on the basis of technology such as wall paper, sound integration, rollable and transparent flexible. LG Display recently invested in Gen8.5 in China and is expected to invest in Gen10.5 OLED mass production line at Paju P10 plant.

On the other hand, for small and medium-sized OLEDs, they have announced that they will use a fast follower strategy based on plastic OLED. LG Display is in mass production of plastic OLED panel to be applied for LG Display’s next smartphone, V30, next smartphone, and is ready for the mass production in the E5 line of Gumi. In addition, they plan to invest 10trn won additionally to Gen6 line, which is expected to increase 13 times the current capacity by 2020.

Based on this aggressive OLED investment, LG Display plans to raise its portion of OLED sales up to 40% in 2020 from current 5% in large-area OLEDs and small- and medium-sized OLEDs.

Currently, large-area OLEDs continue to increase capacity and yield and LG Display is likely to expand sales in the future, as it is dominating the premium TV market as it is expanding the camps of Sony, Philips and Panasonic as well as LG Electronics. The success of mass production in small- and mid-sized OLEDs will determine whether or not LG Display plans to achieve its plan.

LG Display has decided to change its business portfolio to concentrate organic light-emitting diode (OLED) business. Through the conference call that reported operating profits in the fourth quarter of 2016, LG Display announced on January 24 that it plans to invest some 5 trillion won in facilities this year, and put investment in OLED including Gen6 Plastic OLED and large-size OLED manufacturing facilities. Especially, its investment in OLED is expected to rise to 70% by 20% in 2017, compared to last year with a plan to expand the OLED market.

LG Display Chief Financial Officer (CFO) Kim Sang-don said, “LG Display has reorganized its business structure by integrating previous 5 divisions into a total of 3 divisions such as TV, IT and mobile for its business efficiency.” “It will concentrate not only clear picture but also design and price in large-size LCD TV panels, while producing small and mid-size OLED panels focused on E-5 Gen6 POLED mobile and automotive business. Gen6 E-5 plants also plan to start producing POLED in the third quarter this year. Regarding new Capa, the sizes of new OLED will be 55”, 65” and 77”, and the Capa over 65″ is expected to rise more than 40% this year, a 10 % increase from 30% in 2016”.

Kim said, “the company has secured a total of 60,000 OLED TV capa in the second half of the year according to this year’s OLED TV forecast and yield improvement, and this is the capacity that can produce 1.5 million to 1.8 million televisions a year. Also, he emphasized “Our large-size OLED panel achieved the industry’s yield of 80 percent, which means OLED achieved its golden yield in just two years, compared to LCD’s golden yield of 10 years”.

Kim added “Regarding Chinese firms’ large-size LCD panel line extension that has become an issue recently, the production of Gen8.5 OLED and LCD is now available, but we still need to examine technology, production and productivity of over Gen10 panels. We will carefully consider the extension of the super large 60” 4K and 8K market. Also, LG Display’s middle and long-term strategy is to create a new OLED market so as to expand OLED.

With regard to the price comparison with LCD TV, “more than 60,000 capa is added this year through OLED line extension, and this is the capacity that can produce 1.5 million to 1.8 million televisions. It is a very small scale compared to the entire TV market size, and the price comparison with LCD is meaningless” according to him. LG Display announced that it plans to expand the OLED market for commercial purposes such as signage, broadcasting and medical use in 2007, while emphasizing the target of OLED TV is not the competition with LCD but only the high-end premium TV market.

Meanwhile, regarding the ownership of crystal sound that were unveiled at CES 2017 held in Las Vegas, USA, “In addition to LG DISPLAY’s crystal sound panel, its strategic partner Sony Entertainment Television (SET) improved sound through sound control and algorithm, and OLED panel’s quadrant sound control is LG DISPAY’s own technology” it said.

LG DISPLAY posted 7.9360 trillion won in sales and 904 billion won in operating profits in the fourth quarter last year, recording the black-ink balance for 19 consecutive quarters. Its net profits increased to 824.7 billion won, a whopping 335% increase from the previous quarter. 38 percent of sales in the fourth quarter came from displays for televisions; 31 percent from displays for mobile devices; 17 percent for laptops and tablets; and 14 percent for monitors. Due to the increase in panel prices and demands, its sales reached 26.5041 trillion won, and operating profit was 1.3114 trillion won, surpassing the 1 trillion won for a fourth straight year while keeping a positive trend in its profits.

In the meantime, UBI Research expected that LG Display will produce 1.5 million large-size OLED panels over 50-inch.

LG Display is actively participating in the ‘CES (Consumer Electronics Show) 2017’ to be held in Las Vegas, the U.S., from January 5 to 8 to show more diverse products and next-level differentiated technologies.

LG Display plans to convey its purpose to achieve consumer innovation together with LG Display’s differentiated technologies under the slogan of ‘Our Technology, Your Innovation’, at its private showroom for clients in the Las Vegas Convention Center, from January 4 to 8.

Especially, LG Display will showcase new products that basically has superior picture quality and fulfill OLED’s next-level design and potential, as well as a variety of products that provide new future to customers with its own differentiated technologies.

■ Unveil the New OLED TV with Superior Picture Quality, and Extreme Design

During CES, it will also introduce a 55-inch transparent FHD display featuring the improved colors and more natural and transparent screen.
LG Display will showcase 65-inch and 77-inch UHD Wall Paper TV line-up with ultra thin and innovative design. It will also show off futuristic displays, including a 77-inch double-sided UHD display and 77-inch six rollable UHD commercial displays, which will open various possibilities of OLED with surpassed picture quality.

■ Constantly evolving IPS, Innovative LCD Technology

LG Display’s OLED(Organic Light-Emitting Diode) and a high-resolution technology IPS evolve further.
LG Display will show off IPS products with improved picture quality and price competitiveness by using WCG(Wide Color Gamut, a technology to provide a greater range of colors), HDR(High Dynamic Range, a technique to reproduce a greater dynamic range of luminosity), and high-resolution technical solutions.

Especially, IPS Nano Color at this show is LG Display’s own WCG technology that can express more accurate and vivid colors, using nano-sized wide color gamut.
It is increased with the addition of the strength of IPS OLED to offer high color accuracy. This show will apply it to a 65-inch UHD product.

LG Display will expand in-TOUCH technology of touch sensor-embedded panel to 24-inch monitors, while showing off the key advantages of design to offer differentiated values to IT market through its high-resolution product strategy.

in-TOUCH technology offers a thinner and lighter product since there is no Touch Cover Glass.
In addition, Active Pen Solution is applied to a 13.3-inch in-TOUCH panel, so that it features higher touch accuracy outside the screen, faster touch response, and more precise calibration of the touch point, compared to conventional Add-on(touch sensor-added panel).

LG will also show not only the world’s largest 38-inch curve monitor suitable for such offices as stock trading, movie-watching, and immersive gaming but also 32-inch 8K monitor with ultra high resolution and HDR monitor panel for broadcasting and video editing experts.

P-OLED featuring wide screen, perfect expression of black, and high design flexibility is an optimized technology to provide new vision to automotive interior in harmony with the curved surfaces of vehicles.
LG Display plans to have a showroom for visitors to experience futuristic concept products in a real situation, including Cluster that will provide better safety and convenience, Center Information Display, passenger seat display, large transparent OLED, and mirror-type OLED.

Besides, LG Display is aiming to enter the middle and small-sized OLED market through 5.5-inch QHD P-OLED. In addition, it will introduce the P-OLED for Smartwatches with diverse designs, including circular or square pattern.

LG Display Vice Chairman, Han Sang-beom announced “LG Display has offered leading products that can provide new values beyond the expectation of the market, with its differentiated technologies.” “It will proactively respond to the market through its next-generation display OECD and new innovative technologies, and consolidate its position as a leading company”.

On October 22, LG Display emphasized their conviction in large area OLED and plastic OLED once again when announcing the performance results held in LG Twin Towers. LG Display revealed that their future business will be OLED and will lead the market through OLED.

LG Display’s CFO Sang-don Kim announced that OLED is the top priority in terms of portfolio, and regarding display’s future direction, explained that there is new momentum through automotive, IoT, and commercial display. He also added that the sales did not quite meet what was estimated earlier this year but it is on proper track.

LG Display is estimating 400-500 thousand units of OLED TV panel shipment for TV and aiming for 1 million units next year. Regarding the poor sales, he gave trial errors in new technology development, which was the main focus, as the reason. LG Display will plan optimized investment after market trend consideration.

In 2015, 55inch or larger panel for TV occupied 8% of the shipment, but the target is gradually increasing it to 20% or higher. LG Display highlighted TVs are becoming larger at a fast pace; 65inch and 77inch OLED TV, rather than what was expected to be the main product 55inch, showed higher than expected sales. Kim explained that to maximize production cost reduction of OLED panel, they are internally adjusting material cost and yield. He also forecast that the demand will increase through production increasing projects.

LG Display recorded 7,000 million USD* of revenue in 2015 Q3. This 7% increase compared to its previous quarter is due to the increase of shipment area through TV’s panel size increase and success of product mix. Business profit fell by 32% compared to previous quarter with 300 million USD*. LG Display revealed they will push for profit improvement through inventory level management and operation rate adjustment. They also reported they will strengthen competitiveness through synergy with OLED lighting business and showed anticipation for future.

With the active release of Apple’s smartwatch within Korean market, the interest in LG Display’s plastic OLED business is suddenly increasing.

LG Display began OLED development at the similar time as Samsung Display, but misjudgments on OLED potential and marketability led to the late market entrance and folding of the rigid OLED business. With the plastic OLED business, LG Display is matching the progress of the competitor, Samsung Display, and speeding up the development and commercialization.

Already, LG Display supplied plastic OLED for LG Elec.’s G Flex that went on sale in November 2013. Although the panel was 6inch, as the resolution was only at HD level, there was criticism that compared to Samsung Elec.’s FHD OLED which was released in the same period, the resolution fell short.

This year, LG Display supplemented the resolution and succeeded in FHD plastic OLED production. The panel is applied to G Flex 2, and it is also supplied to LG Elec.’s G Watch and Urbane.

However, in contrast to the competitor, LG Display is using different business strategy for plastic OLED business. Rather than plastic OLED for smartphone, which has weak market control, they are focusing on small plastic OLED for smartwatch that is already receiving positive response.

Following the uproar within the smartwatch market, created by Samsung Elec.’s greatest rival Apple, LG Display, Apple’s supplier of plastic panel, is making all effort in panel production. Additionally, as LG Display has already secured a position as Apple’s next smartwatch plastic OLED supplier, although the capa. is lower than Samsung Display’s, the line is actively operational.

It is also estimated that LG Display will decide soon on Gen6 plastic OLED line investment to promote closer relationship with Apple. Apple is already seriously considering flexible (plastic) OLED for next iPhone series, and it is analyzed that they requested LG Display for Gen6 line investment for stable product supply.

Although LG Display does not have as high volume of clientele as Samsung Display, it is anticipated that they will establish a bridgehead in OLED panel industry through forming mutually beneficial relationship with a giant company called Apple.

To change the rules of the game of TV market, LG Display held a media event on 19 May, overseen by Yeo Sang-deog, the president of LG Display’s OLED division. This event was structured only with OLED and showed LG Display’s determination regarding future OLED panel business.

Yeo Sang-deog mentioned that OLED panel will become LG Display’s future cash cow and suggested that LG Display could be reorganized to focus on OLED business.

In order for LG Display to commercialize OLED, clients who can buy the panels are important as well as companies that develop materials that can actualize qualities needed and necessary equipment. Yeo expressed that LG Display will engage in formation of ecosystem related to OLED industry to grow OLED panel as an export business.

For this event, LG Display prepared separate exhibition area formed only with OLED. The exhibition space was largely separated into 3 sections. The first area exhibited OLED TV and QD-LCD TV, which is receiving much focus recently, in comparison and demonstrated how OLED TV is much superior in terms of viewing angle, contrast range, and color gamut. The second exhibition space showed large size OLED panel. OLED TV with HDR technology which was shown in CES 2015, and convex OLED were shown, as well as transparent OLED. World’s first 500R curved OLED TV, wallpaper OLED TV with the thickness of a coin, and edge slice OLED TV were revealed. The third space was an area for what is becoming an issue, plastic OLED. LG Display exhibited 1.3 inch round plastic OLED for smart watch, 5.5 inch FHD curved plastic OLED, 6 inch active bending (dual bending) plastic OLED, and 12.3 inch cluster plastic OLED for dashboard in vehicle.

LG Display revealed all OLED products to domestic and international press, and demonstrated their confidence in OLED panel industry leadership.

2015 is forecast to be the year flexible (plastic) OLED actively enters the market. Galaxy S6, which was hugely popular in MWC 2015, is already to have received pre-order for 20 million units. Of these, approximately 50% is estimated to be for Galaxy S6 Edge.

Compared to only several million units of previously released Galaxy Round and Note Edge, the 2015 shipment for Galaxy S6 Edge is anticipated to reach 20 – 30 million units. In order to prepare for Galaxy S6 Edge sales Samsung Display began A3 line operation. Existing A2 line’s Gen 5.5 15K supply and Gen 6’s 15K of flexible OLED panels are to be used. Using these shipment, Samsung Electronics is planning to sell 50% of flexible OLED equipped Edge. What began with Omnia, Samsung Elec.’s lead in rigid AMOLED market is being transferred to their ability to control the secondary flow of flexible OLED market.

Smart phone market’s absolute leader Apple begins the sales of Apple Watch, equipped with LG Display’s plastic OLED, from April. Expected sales volume for this year is approximately 20 million units.

Samsung Elec.’s Galaxy S6 Edge is estimated to cost approximately 1,000 USD, and Apple is releasing various products costing from hundreds USD to thousands USD. If each product from the 2 companies cost 1,000 USD, the total set market is expected to exceed 35 thousand million USD.

The market that these 2 companies will create in this year’s smart device market is quite stunning. Accordingly, the flexible (plastic) OLED panel market is also expected to grow rapidly. Although neither company revealed the panel cost, considering the existing market is staying at 7 thousand million USD the 2015 AMOLED total market is forecast to reach 9 thousand million USD.

In MWC2015, various companies, including Samsung Electronics, LG Electronics, Huawei, and Asus, exhibited smart watch. Since 2014, Samsung Elec. and LG Elec. began to sell smart watch, Asus and Huawei are shipping smart watch equipped with rigid AMOLED panel. Apple, a latecomer but also strongest rival, is planning to actively sell smart watch, with LG Display’s plastic OLED, from April.

From the outside, all 5 companies have smart watch with AMOLED, but other than Apple which uses iOS, and Samsung Elec. that uses Tizen, the insides of the other 3 companies are the same. This is because they use Google OS. Hence the software of these 3 companies’ products are similar, and without the smart watch exterior the functions are almost identical. The only differentiations are due to smart watch design. Huawei’s smart watch face design is similar to LG Elec.’s, and the back design practically cannot be distinguished from LG Elec.’s products.

<LG Elec. Smart Watch (left), Huawei Smart Watch (right)>

<LG Elec. Battery Charger (left), Huawei Battery Charger (right)>

In MWC2015, Google sector showed how difficult it would be for any company to conquer the market.

Supported by the success of WOLED production for OLED TVs, LG Display is ambitiously formulating the next project with the plastic OLED. The development of dual-edge plastic OLED was completed as an extension of the plastic OLED product already used in LG’s G Flex and G Watch, and the product for automobile dash board is under preparation.

LG Display CEO Han Sang-beom mentioned at the press conference that the dual-edge plastic OLED panel to apply for diverse customers and smartphones is under discussion and the product for a dash board is under development in close collaboration with two automobile companies. However, he also said that it may require more time as the display for an automobile demands brighter light quality and the clients are expecting to use it from 2017.

Though the original plastic OLED produced by LG Electronics for G Flex was only HD level resolution incompatible with other displays for smartphones, now the FHD plastic OLED for the G Flex 2 which was announced at CES 2015 secured enough competitiveness in terms of resolution compared to the LCD and OLED panels manufactured by other rival companies.

“A decision for investment will be made soon!” said Mr. Han at the end of the press conference regarding the plastic OLED line investment.

The size of the early investment is estimated to be Gen6 15K and the major clients for the plastic OLED panel will be LG Electronics and Apple.